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Straight- Units of Double-Declining-
Year Line Production Balance
(Cost – Residual Value) / Years =Yearly Depreciation
Units-of-production method:
(Cost – Residual Value) / Total Hours =Rate
Rate xHours =Yearly Depreciation
2012
2013
2014
Double-declining-balance method:
xRate =Yearly Depreciation
2012
2013
Since depreciation cannot cause book value to fall below residual value:
– =Yearly Depreciation
2014
The method that yields the most depreciation expense in 2012 is the
3.
The method that yields the most total depreciation over the three years is the
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1.
Straight- Units of Double-Declining-
Year Line Production Balance
2012 40,500$ 58,050$ 90,000$
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